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Deductions & credits
Possibly. It depends on how long you rented the home before selling it, @melissameria.
The IRS says:
If you used and owned the property as your principal residence for an aggregated 2 years out of the 5-year period ending on the date of sale, you have met the ownership and use tests for the exclusion.
This is true even though the property was used as rental property for the 3 years before the date of the sale.
In that case, you would qualify to exclude some or all of the gain on the sale of your home if you didn't use the exclusion on the sale of another residence during the 2-year period that ends on the date of sale, or if you used the exclusion within the last 2 years but this sale of your home is due to a change in employment, health, or unforeseen circumstances.
See Property (Basis, Sale of Home, etc.) 5
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